European Central Bank (ECB – general name for individual central banks of Eurozone countries) is trying to lower the EMU periphery bond rates via direct bond purchasing program. The purchases are made by national central banks and Slovakia bears its part of a potential default risk. The share is equivalent to Slovak share on ECB capital. The bonds are held until maturity.

We neither include PIIGS bonds held by ECB as a collateral against its loans to European banks, nor the Emergency Liquidity Assistance programs in our risk exposure summary, due to lack of suitable information needed for Slovak exposure calculation.

The troubled Eurozone countries are assisted by these institutions and mechanisms:

European Financial Stability Facility (EFSF) – Is a special purpose vehicle financed by members of the eurozone based in Luxembourg. Its loans are guaranteed also by Slovakia.

Launched in February 2012, European Sovereign Bond Protection Facility (ESBPF) is a part of efforts to use leveraging to enhance EFSF capabilities. ESBPF would provide a partial risk protection certificate to a newly issued bond of a Member State. The certificate could be detached after initial issue and could be traded separately. It would give the holder an amount of fixed credit protection of 20-30% of the principal amount of the sovereign bond.

International Monetary Fund (IMF) – Global financial institution, which provides cushion loans fpr countries in financial difficulties. IMF participated on the first Eurozone rescue package of 750 billion (EFSF+EFSM+MMF) agreed in May 2010 providing 250 billion EUR capacity. IMF provided 30 billion EUR for the first loan for Greece (110 billion EUR overally). Slovakia didn’t participate directly on the loan, but provided funds for the IMF part of the loan according to its share in IMF.